Amazon Go, Amazon’s new checkout-free retail environment, has finally launched in the ground floor of the company’s Seattle headquarters. After more than a year of testing, the supermarket is open to the public for the first time, and it has significant implications for the future of Food & Beverage and retail more broadly.
In a world first, the store has no checkouts, and instead uses cameras to track what products shoppers are picking up. When shoppers enter the store, they scan their phone screen, displaying the Amazon Go app at a turnstile, like a futuristic library. They then put groceries into their baskets and walk out of the store. Shoppers’ credit cards are then charged by Amazon Go after they leave the shop.
The cashless future of retail
It’s no secret that economies are moving toward a completely cash-free future. Amazon Go’s solution is the next step in a long journey stared by Quirijn Bolle, who set up Marqt in 2006, a cashless supermarket in Holland. Bolle’s reasoning for this was straightforward: by creating a new store from that was cashless from the outset, it was impossible to alienate shoppers who favoured cash. It also meant that he could pass on operational savings to shoppers and the business, lowering overheads.
The same is true for Amazon Go. By taking cash out of the equation completely, Amazon are able to save on their overheads as well as give their customers a more convenient experience.
Time to shine
The key advantage to the shopper is that they no longer need to queue to leave the shop. Naturally, this keeps people calm, streamlines the overall shopping experience and also frees up valuable space for new activities.
With a roughly 20 percent (average global) increase in Food & Beverage in retail space over the last decade, freeing up space previously used for checkout queues means the space could be used for profitable F&B units, or newly integrated digital technologies. Michael Sebti, Interiors Team Leader at CADA Design believes “reclaiming precious retail space is the holy grail. It will happen, firstly by the bold, and subsequently—after a delayed domino effect—by all the others.”. In other words, we’re about to witness a new era of spacial engineering across retail.
The counterpoint here is that removing checkouts has resulted in removing what is potentially one of the main brand touchpoints that retail stores have…
Thanks to the real-time, always on tracking, the retailer is able to offer a customised experience to their user, so perhaps this new space could be used to offer personalised offers.
In a related topic, the space has significant opportunities for integration of augmented reality technology. Mixed reality is emerging as the immersive experience of choice (in the game space, Nintendo just launched Nintendo Labo, a new cardboard-based make-play-discover product!), so perhaps the newly freed up space could be used for AR-driven personalised offers.
According to Michael, “Clever retailers will be first to understand the value in creating a deeper, richer brand experience for the long-term benefit. The others will follow but may initially choose to use that space with less emphasis on brand enrichment.”
While checkout-free environments increase the flow in and out of the supermarket, they also reduce the amount of face-to-face interaction, something that many shoppers enjoy and, sometimes, require. Of course, removing checkouts doesn’t necessarily mean removing staff from shops. It means redistributing checkout workers to new support roles. If this doesn’t happen, it means potentially laying off some of the more financially vulnerable members of staff, raising a moral question.
Removing traditional checkouts creates a further issue—that customers don’t feel comfortable simply walking out of the store; some feel like they’re stealing. And in fact, some customers in this initial period have been, meaning that the monitoring technology is not quite yet 100 percent accurate.
That said, with integrated machine learning and some of the world’s best engineers on staff, it’s likely that these inaccuracies will be cleaned up at Amazon Go.
Finally, it’s a real possibility that heavier digital integration opens the store up to cyber-attacks. What happens if the app is hacked and users can’t enter the store?
We’re intrigued to see what the first year of Amazon Go looks like. If it’s anything like any of Amazon’s other brands, statistically speaking it’s likely to be a success. So, what impact will this have on the wider market? Will more city centre supermarkets incorporate an app-based payment system?
If you’re interested in how your retail space could be better prepared for the future, get in touch.